Key facts
- The Federal Reserve decided to keep its benchmark interest rate unchanged.
- The decision was made by a 9-3 vote during the FOMC meeting.
- The interest rate remains in the 3.5-3.75 percent range.
- This is the fifth consecutive meeting where the Fed has paused rate hikes.
- The Fed cited ongoing concerns about the economic impact of the Iran war and calls for lower borrowing costs.
The U.S. Federal Reserve decided to maintain its benchmark interest rate at the 3.5-3.75 percent range during its latest two-day Federal Open Market Committee (FOMC) meeting. This marks the fifth consecutive pause in rate adjustments. The decision was influenced by ongoing concerns regarding the economic repercussions of renewed fighting in the Iran war and President Donald Trump's repeated calls for lower borrowing costs.
The Fed stated that economic activity is expanding at a solid pace, despite elevated uncertainty stemming partly from the conflict in the Middle East. The central bank noted strong productivity growth and capital investment, with job gains keeping pace with the workforce and the unemployment rate remaining largely unchanged.
Three participants in the rate-setting decision—Beth Hammack, Neel Kashkari, and Lorie Logan—reportedly favored a quarter-percentage-point increase in the rate. President Trump had previously reiterated his stance, urging the Fed to lower interest rates to ensure the U.S. has the lowest rates globally.